By TIOL News Service

AHMEDABAD, OCT 18, 2018: 2018. THE petitioner has challenged the communication issued by the Comptroller and Auditor General of India (CAG) calling upon the petitioner to submit to Service Tax audit at the hands of the officers of the CAG.

The petitioner raised a contention that with the introduction of the Goods and Services Tax Act, the Finance Act, 1994 and the Service Tax provisions made thereon stand repealed.

By referring to Section 174 of the CGST Act, 2017, it is contended that the Saving Clause contained therein would not save Rule 5A of the Service Tax Rules, 1994, so as to enable the respondents to initiate fresh proceedings for audit under the said Rule.

The High Court extracted clause (e) of the said Section and observed -

"8. A perusal of the said clause of Sub­section (2) of Section 174 and other clauses would, prima facie, show that there was no saving of Rule 5A in such manner that fresh proceedings for audit could be initiated in exercise of powers under the said Rule. We, therefore, have serious doubts whether, with the aid of Rule 5A of the Service Tax Rules, 1994, the CAG can carry out compulsory Service Tax audit of private agencies like the petitioner."

In fine, by way of ad­interim relief, the impugned order dated 09.10.2018 was stayed. Inasmuch as it was directed that the CAG shall not carry out any further Service Tax audit of the petitioner.

(See 2018-TIOL-2194-HC-AHM-ST)